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United Nations agreement should include provision protecting climate measures from ISDS challenges

April 22, 2016 - 7:23am

The Council of Canadians is calling again on world leaders to support a provision in United Nations climate agreements that would prohibit investor-state dispute settlement (ISDS) challenges by corporations against government measures that address the climate change crisis.

CBC reports, "Over 160 countries, including Canada, are expected to sign the Paris Agreement on climate change at a ceremony at the UN in New York today. The agreement was reached in Paris last December but April 22 — Earth Day — is the first day countries can actually sign the agreement. ...The year 2015 broke 2014's record for the hottest year ever, and the the first three months of 2016 have already eclipsed the prior record highs for those months. ...That data adds to doubts that meeting the national targets for the Paris Agreement will be enough to achieve its goal of limiting the warming of global temperatures to well below two degrees Celsius, and ideally below 1.5 degrees, from pre-industrial levels."

The article adds, "The two biggest emitters, China and the U.S., issued a joint statement on March 31, indicating they would ratify the agreement this year, 'with a view to bringing the Paris Agreement into force as early as possible'. They account for about 38 per cent of global greenhouse gases, followed by Russia, India, Germany and Japan. Together, those six countries account for over 55 per cent, according to the UN Framework Convention on Climate Change." The European Union, another top emitter, says it also wants to be in the first wave of ratifying countries.

The Associated Press explains, "The agreement will enter into force once 55 countries representing at least 55 per cent of global emissions have formally joined it."

In terms of Canada, CBC notes, "Prime Minister Justin Trudeau is in New York for the signing ceremony, along with Environment Minister Catherine McKenna. McKenna says the government will first prepare its own climate plan before ratifying the Paris pact this fall. 'We need to have a plan to meet our international obligations, and we have six months to do that', she told CBC News this week." Another CBC report highlights, "Trudeau will formally sign the Paris climate agreement today at a ceremony in New York, where he's expected to bring a lot of enthusiasm for the agreement's objectives — but few specifics about how he'll meet them."

The Council of Canadians is concerned that the Trudeau government both lacks a clear plan to reduce carbon pollution and that it is at the same time also seeking the ratification of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), considering (and appears supportive of) the ratification of the Trans-Pacific Partnership (TPP), and is pursuing 'free trade' agreements with China, India and other countries. The federal government remains supportive - and reportedly insistent - on these agreements containing the controversial 'investment protection' provision.

In February, the Council of Canadians, Friends of the Earth Europe, Food & Water Watch, the Transnational Institute and nine other groups based in the European Union and the United States released an 8-page briefing paper titled Oil Corporations Vs. Climate: How investors use trade agreements to undermine climate action. The paper highlights how Calgary-based TransCanada is using the Chapter 11 investor-state dispute settlement (ISDS) provision in the North American Free Trade Agreement (NAFTA) to sue the U.S. government for $15 billion in "compensation", including for lost future profits, relating to the rejection of the Keystone XL tar sands pipeline.

It notes, "Rather than learning lessons from trade agreements like NAFTA, governments in the United States, the European Union, Canada, and many other countries are now pushing for even more trade and investment agreements that would expand the very tool that TransCanada is using to challenge the rejection of the Keystone KL pipeline."

And the paper highlights, "In order to tackle the climate crisis, the U.S., EU, Canada and other countries need to reject 'VIP' treatment for corporations and say no to any trade agreement that includes special rights for foreign investors. Doing so is critical in the fight to protect our communities, our democracy, and our climate."

Beyond campaigning against these agreements, we are also calling a provision in UN climate agreements to protect climate action from ISDS challenges.

Council of Canadians chairperson Maude Barlow makes this argument in her companion piece to the report An ISDS Carve-Out to Support Action on Climate Change by Osgoode Hall Law School professor Gus Van Harten. She writes, "Van Harten outlines how a multilateral agreement on climate change could include a safeguard against the risk of ISDS lawsuits that target climate change action by governments. Without such a carve-out governments face an incentive to avoid climate change action in order to limit potential liability due to actual or anticipated ISDS claims."

The next UN climate summit - COP22 - will take place November 7-18 in Morocco.

It is expected that Canada and the European Union could ratify CETA as soon as the following month.